A nondiscriminating pure monopolist finds that it can sell its 82nd unit of output for $12. We can surmise that the marginal
A)cost of the 82nd unit is also $12.
B)revenue of the 82nd unit is also $12.
C)revenue of the 82nd unit is less than $12.
D)revenue of the 82nd unit is greater than $12.

Question

Quizplus · Accepted Answer

For a nondiscriminating pure monopolist, the marginal revenue of selling an additional unit (in this case, the 82nd unit) is less than the price at which the unit is sold due to the downward-sloping demand curve. To sell more units, the monopolist must lower the price, which affects all units sold, not just the marginal one.

A Nondiscriminating Pure Monopolist Finds That It Can Sell Its